Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:23 | Report Abuse

Bankruptcy—a legal state wherein a debtor (borrower) is temporarily protected from creditors (lenders); under Chapter 11 of the federal bankruptcy code, companies may continue to operate

Chapter 11—a section of the federal bankruptcy code whereby a debtor is reorganized as a going concern rather than liquidated (see bankruptcy)

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:26 | Report Abuse

Credit cycle—the ebb and flow in the availability of credit

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Depreciation—an accounting procedure by which long-lived assets are capitalized and then expensed over time.

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Discount rate—the rate of interest that would make an investor indifferent between present and future dollars

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Dividend—cash distributed by a company to its shareholders out of after-tax earnings

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Covered-call writing—the practice of purchasing common stocks and then selling call options against them

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Financial distress—the condition of a business experiencing a shortfall of cash to meet operating needs and scheduled debt-service requirements

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Full position—ownership of as much of a given security as an investor is willing to hold

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:31 | Report Abuse

Fundamental analysis— analyzing securities based on the operating performance (fundamentals) of the underlying business

Technical analysis—analysis of past security-price fluctuations using charts

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:32 | Report Abuse

Going long —buying a security (see short-selling)

Short-selling—the sale of a borrowed security (see going long)

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:33 | Report Abuse

Hedge—an investment that, by appreciating (depreciating) inversely to another, has the effect of cushioning price changes in the latter

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Illiquid security—a security that trades infrequently, usually with a large spread between the bid and asked prices (see liquid security)

Liquid security—a security that trades frequently and within a narrow spread between the bid and asked prices

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:34 | Report Abuse

Goodwill amortization—the gradual expensing of the intangible asset known as goodwill, which comes into existence when a company is purchased for more than its tangible book value

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Exchange offer—an offer made by a company to its security holders to exchange new, less-onerous securities for those outstanding

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Equity “stubs”—low priced, highly leveraged stocks, often resulting from a corporate recapitalization (see recapitalization)

Recapitalization—financial restructuring of a company whereby the company borrows against its assets and distributes the proceeds to shareholders

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:38 | Report Abuse

Employee Retirement Income Security Act of 1974 (ERISA)—legislation that requires institutional investors to act as fiduciaries for future retirees by adopting the “prudent-man standard” (see prudent-man standard)

Prudent-man standard—the obligation under ERISA to restrict one’s investments to those a “prudent” (conservative) person would make (see Employee Retirement Income Security Act of 1974 (ERISA)

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:39 | Report Abuse

Institutional investors —money managers, pension fund managers, and managers of mutual funds

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Intangible asset—an asset without physical presence; examples include intellectual property rights (patents) or going-concern value (goodwill)

Tangible asset—an asset physically in existence

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:42 | Report Abuse

Investment—an asset purchased to provide a return; investments, in contrast to speculations, eventually generate cash flow for the benefit of the owners (see speculation)

Speculation—an asset having no underlying economics and throwing off no cash flow to the benefit of its owner (see investment)

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:43 | Report Abuse

Takeover multiple— multiple of earnings, cash flow, or revenues paid to acquire a company

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Tactical-asset allocation—computer program designed to indicate whether stocks or bonds are a better buy

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Stock—a marketable piece of paper representing the fractional ownership of an underlying business

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Spinoff—the distribution of the shares of a subsidiary company to the shareholders of the parent company

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:46 | Report Abuse

Short-term relative-performance derby—manifestation of the tendency by institutional investors to measure investment results, not against an absolute standard, but against broad stock market indices resulting in an often speculative orientation.

Absolute-performance orientation—the tendency to evaluate investment results by measuring one’s investment performance against an absolute standard such as the risk-free rate of return

Relative-performance orientation—the tendency to evaluate investment results by comparing one’s investment performance with that of the market as a whole

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:47 | Report Abuse

Investment banking—profession involving raising capital for companies as well as underwriting and trading securities, arranging for the purchase and sale of entire companies, providing financial advice, and opining on the fairness of specific transactions

Merchant banking—an activity whereby Wall Street firms commit their own capital while acting as principal in investment banking transactions

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:48 | Report Abuse

Interest-only mortgage security (IO)—interest payments stripped from a pool of mortgages which, for a given change in interest rates, fluctuates in value inversely to conventional mortgages (see principal-only mortgage security)

Principal-only mortgage security (PO)—principal payments stripped from a pool of mortgages which, in response to changes in interest rates, fluctuate in value in the same direction as conventional mortgages but with greater volatility

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:49 | Report Abuse

Pro forma financial information —earnings and book value adjusted to reflect a recent or proposed merger, recapitalization, tender offer, or other extraordinary transaction

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:50 | Report Abuse

Proxy contest—a fight for corporate control through the solicitation of proxies or the election of directors

Friendly takeover—corporate acquisition in which the buyer and seller both support the transaction enthusiastically

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:50 | Report Abuse

Private-market value—the price that a sophisticated businessperson would be likely to pay for a business based on the valuation multiples paid on similar transactions

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:51 | Report Abuse

Principal— the face amount or par value of a debt security

Coupon—the specified interest payment on a bond expressed as a percentage

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:52 | Report Abuse

Net-net working capital—net working capital less all long-term liabilities

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Investment grade—fixed income security rated BBB or higher

Junk bond - fixed-income security rated below investment grade

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:53 | Report Abuse

Leveraged buyout (LBO)—acquisition of a business by an investor group relying heavily on debt financing

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:54 | Report Abuse

Liquidating distribution—cash or securities distributed to shareholders by a company in the process of liquidation

Liquidating trust—an entity established to complete a corporate liquidation

Liquidation value—the expected proceeds if the assets of a company were sold off, but not as part of an ongoing enterprise

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:55 | Report Abuse

Making a market—acting as a securities dealer by simultaneously bidding for and offering a security

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:55 | Report Abuse

Margin of safety—investing at considerable discounts from underlying value, an individual provides himself or herself room for imprecision, bad luck, or analytical error (i.e., a “margin of safety”) while avoiding sizable losses

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:55 | Report Abuse

Maturity—the date on which the face value of a debt security is due and payable

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:56 | Report Abuse

Interest—payment for the use of borrowed money

Interest-coverage ratio—the ratio of pretax earnings to interest expense

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:56 | Report Abuse

Internal rate of return (IRR)—calculation of the rate of return of an investment that assumes reinvestment of cash flows at the same rate of return the investment itself offers

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 20:59 | Report Abuse

Net operating-loss carryforward (NOL)—the carryforward of past losses for tax purposes, enabling a company to shield future income from taxation

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:00 | Report Abuse

Opportunity cost—the loss represented by forgone opportunities

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:01 | Report Abuse

Plan of reorganization—the terms under which a company expects to emerge from Chapter 11 bankruptcy

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:03 | Report Abuse

Preferred stock—an equity security senior in priority to common stock with a specified entitlement to dividend payments

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:03 | Report Abuse

Return—potential gain

Risk—amount and probability of potential loss

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:04 | Report Abuse

Secured debt—debt backed by a security interest in specific assets

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Security—a marketable piece of paper representing the fractional ownership of a business or loan to a business or government entity

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:05 | Report Abuse

Sensitivity analysis—a method of ascertaining the sensitivity of business value to small changes in the assumptions made by investors

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:06 | Report Abuse

Senior-debt security—security with the highest priority in the hierarchy of a company’s capital structure

Subordinated-debt security - security with a secondary priority in the hierarchy of a company’s capital structure

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:06 | Report Abuse

Tax-loss selling—selling just prior to year-end to realize losses for tax purposes

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > 2023-01-04 21:07 | Report Abuse

Tender offer—a cash bid to buy some or all of the securities of a target company

Self-tender—an offer by a company to repurchase its own securities